In February, Caixin China'S Manufacturing PMI Dropped To 40.3, The Lowest Since Data.

In February, the new China Manufacturing Purchasing Managers Index (PMI), which was released in March 2nd, recorded a 40.3 decline of 10.8 percentage points, which was the lowest in April 2004. It was lower than the 40.9 in November 2008 when the global financial crisis broke out.

This trend is consistent with the PMI of the National Bureau of statistics. The PMI released by the National Bureau of statistics in February was 35.7, down from 14.3 percentage points last month.

The new order index fell to its lowest level since records, the first time since July 2019, it has fallen to the contraction zone. Manufacturers generally say that this is related to the new crown outbreaks causing factory shutdown. At the same time, the new export orders index in February also declined significantly due to restrictions on transport and cancellation of orders.

Many manufacturers stopped working or understarted, resulting in a sharp decline in output and output index to the lowest recorded level. Categorical data showed that only a few medical device related products increased.

The restriction of personnel flow leads to the shortage of employment. In February, China's manufacturing employment index was the lowest recorded. Pressure on manufacturers' capacity has intensified, and the volume of backlog business has also risen sharply.

Due to the limited transport and the delayed supply of manufacturers, the supply chain of manufacturing industry has been seriously affected, and the supplier delivery time index has dropped to the lowest level ever recorded.

Affected by the difficulties in supply of raw materials, purchasing inventories declined sharply, and stock index of raw materials recorded the lowest since February 2009. Manufacturers can only use the original inventory, resulting in second consecutive months of finished goods inventory decline, but the decline is less than last month.

In February, the purchase price index of raw materials decreased slightly in the expansion range, and the pressure of cost rise was relatively low. Manufacturers say rising costs are related to transportation costs and rising prices of raw materials. In order to promote sales, the manufacturing price of manufacturing products dropped for the first time in three months.

China's manufacturing industry is generally confident of production in the next 12 months and its optimism has risen to a five year high.

Zhong Zhengsheng, chairman and chief economist of the new financial think-tank, said that the new pneumonia epidemic swept across the country, leading to widespread economic disruption, which is the root cause of the decline of PMI in the manufacturing industry of Caixin in February. Supply and demand is two, supply chain stagnation, previous orders are backlog, but entrepreneurs are more confident. Under the escort of more active fiscal and monetary policies, with the gradual control of the epidemic, enterprises are accelerating their recovery and the economy has a significant rebound.